Kuwait Court of Cassation principle number 107

Summary: - The doctrine of unforeseen circumstances. Its application by the court. A discretionary power intended to reduce an obligation to a reasonable level by narrowing its scope or increasing its counter-performance. Judicial intervention to reduce the obligation to a reasonable level. Its condition. Hardship threatening grievous loss. The criterion for this. Objective considerations only, not circumstances connected with the debtor personally. Rule: The provision in Article 198 of the Civil Code, on the basis that the court ought to have applied the doctrine of unforeseen circumstances and reduced the obligation to a reasonable level by narrowing its scope or increasing its counter-performance upon the emergence of the financial crisis that struck the countries of the world, including the State of Kuwait and the appellant company, during the period between the commencement of performance of the contract and before its full performance, as it led to a reduction in its financial liquidity and its inability to fulfill its financial obligations, because judicial intervention to reduce the obligation to a reasonable level is a discretionary power whose exercise requires the fulfillment of certain conditions, most importantly the condition of hardship threatening grievous loss. The criterion for this hardship is objective considerations, not circumstances connected with the debtor personally. Since the appellant attributed the damage it sustained to its own personal circumstances and not to objective considerations concerning the relationship in dispute, the appeal was brought without its legal and factual foundation, requiring its dismissal and affirmation of the judgment appealed against in the manner to be stated in the operative part.